GAIN Report - GR4022 Page 2 of 18
Required Report - public distribution
Date: 9/13/2004
GAIN Report Number: GR4022
GR4022
Greece
Fresh Deciduous Fruit
Annual
2004
Approved by:
Ann Murphy
U.S. Embassy Rome
Prepared by:
Stamatis Sekliziotis
Report Highlights:
Apple production in 2004/2005 is expected to be 283,000 T or 70% higher than last year’s weather-damaged crop. Exports are channeled to Balkan countries buying on price. Apple imports, at 28,000 T in 2003, were high due to the poor crop. However, apple imports are expected to continue and U.S. apples, helped by the weak dollar and superior quality, have made inroads into the Greek market. Domestic apples lack adequate post harvest handling. Pear production is estimated at 46,000 tons for 2004/2005. Table grapes are predominantly Sultanas and Victorias exported to EU partners. Greek table grape production is estimated at 322,000 T in 2004/2005.
Includes PSD Changes: Yes
Includes Trade Matrix: Yes
Annual Report
Rome [IT1]
[GR]
Table of Contents
Executive Summary 3
Production 3
Fresh Apples and Pears 3
Prices 5
Profit Margins 6
Consumption 6
Fresh Table Grapes 7
Market/Competitor Statements 7
Fresh Apples and Pears 7
Table Grapes 9
PS&D Table, Fresh Apples 10
Export Trade Matrix, Fresh Apples 11
Import Trade Matrix, Fresh Apples 12
PS&D Table, Fresh Table Grapes 13
Export Trade Matrix, Fresh Table Grapes 14
Import Trade Matrix, Fresh Table Grapes 15
PS&D Table, Fresh Pears 16
Export Trade Matrix, Fresh Pears 17
Import Trade Matrix, Fresh Pears 18
Executive Summary
Production
Fresh Apples and Pears
As a result of favorable weather conditions, which prevailed in most of the apple producing regions of Greece during the blooming stage, coupled with normal weather conditions during fruit development, fresh apple production in Greece for marketing year (MY) 2004/05 is expected to be higher by almost 70% over that produced in (MY) 2003/04. There were extreme weather conditions in 2003 making production suffer a 30 percent reduction compared to the 2002 crop. Presently, a total amount of 283,000 MT of apples is predicted to be produced commercially in (MY) 2004/05 compared to 165,000 MT in (MY) 2003/04 (figure slightly revised from that reported in GR 4001). According to farmer organizations, central Greece was favored mostly by good weather, while in west Macedonia (the region most affected by frost in 2003) slightly unfavorable weather conditions prevailed this year, degrading red apple varieties in quality only. Smaller size of fruit is the problem this year in West Macedonia, which may have been the result of stress caused by extreme weather a year before.
As cited in GR 4001, a large amount of apples were downgraded in 2003 after they were hit by hail. Reportedly, this year hailstorms in apple producing regions were negligible. In general, average quality and quantity of the (MY) 2004/05-apple crop is considered to be at normal levels, after an almost three year period of relatively short harvests.
Acreage of apple orchards does not show an increase over the past years. On the contrary, some gradual decrease is reported, particularly in regions severely hit by adverse weather conditions, prevailing since 2001. These acreage reductions are of negligible importance from the point of view of fruit output because most of the trees lost or uprooted due to age, are frequently replaced by new improved varieties. In the late 80s and the 90s, the Greek Ministry of Agriculture promoted and supported expansion of red varieties (Red Delicious in particular) and incentives were offered for farmers to uproot trees from the plains and use hilly and mountainous soils for such crops. The plan was to improve fruit quality, which finally was not as successful as expected. This is mostly because of lack of know how in implementing modern cultivation practices. Greek farmers have not learned to specialize in apple crop production. Most of them are dealing with more than one crop on relatively small sized farms.
According to a German study prepared in the early 90s, Greece ranked 8th according to an evaluation of the fresh fruit sectors of 9 countries, based on flexibility, technology, quality, consistency and innovation. First came Spain with 9.2 points, while Greece got 3.6 points. Trade sources report that since then, the Greek apple sector (cultivation, variety composition, storage and marketing) has improved a lot, but still many things have to be done in order to be able to compete with EU or third country imports of similar products (from Italy, Germany, New Zealand, Chile and USA) domestically and abroad. Currently, most Greek fresh products, including apples, are sold to former Eastern bloc countries where quality is not the key criterion, but price. Albania and Bulgaria absorb the bulk of Greek apples.
Reportedly, Greek apples (mostly the red varieties) appearing in the market after the month of February are of unacceptable quality, a fact, which has to do with a lack of satisfactory production and preservation practices, a lack of facilities, poor facilities, packing methods and marketing procedures. This quality problem becomes a key issue for those amounts destined to European markets, where distance is an additional problem. Apples are transported mostly by trucks through Yugoslavia and on car ferries through Italy.
Because of this quality problem, Greek apples although cheaper than similar imported apples, have faced stiff competition from other apples purchased from Chile, US and elsewhere (i.e. Washington Red Delicious). Greek consumers and tourists prefer better quality products and imports of better quality products have shown a spectacular increase since 1998. A number of attempts have been made by individual Greek farmers and farming groups to improving quality, but these are limited. In fact, Greek apple farmers complain that they do not receive enough support aimed at improving quality. Greek apples are famous for their taste, but this is not enough. Farmers report that integrated Orchard Management methods and modern preservation practices have to be implemented in the sector, because consumers buy by the eye and not by taste.
The apple variety of Zagora (the most preferred by Greek consumers) produced only in Central Greece (on the mountain of Pilion) has its own EU-protected name “Zagorin”, a denomination of origin, according to EU Regulation 1107/96. This local Red Delicious apple variety makes up such a high percentage of domestic consumption that they affect the price level of fresh apples in Greece, provided that they are available. In 2003, due to adverse weather, availability reached a minimum level. When adverse weather conditions prevail in Greece, consumer prices for fresh products are prohibitive for the average income consumer. A detailed description of these developments is given in GR 2021, GR 4001 and GR 3019. Such developments result in higher farmer and retail market prices, and as a result consumption of imported apples in the Greek market is high. Due to lower domestic output in 2003, apple imports in CY 2003 reached 30,772 MT compared to 18,173 MT a year earlier. Actual domestic consumption exceeds 200,000 MT of apples.
Recently, apples of Italian origin (almost 50% of total imports in CY 2003) dramatically entered the Greek fresh apple market through an extensive advertising campaign in the Central Markets of Athens and Thessaloniki, followed by German, Chilean, Spanish, Austrian and US apples. Some U.S. apples also reach Greece through Germany and other European member states. U.S. apples are gradually but steadily, gaining ground among Greek consumers. This caused a stiff competition in the domestic market and Greek producers and traders realize that the future of Greek apple sector must focus on crop restructuring, better certification of fresh products, improved quality, and promotion and packing methods. At orchard level, the introduction of more popular varieties and lower production costs are necessary. Also, it has to be noted that consumer awareness of chemical residue levels is growing and Consumer Organizations ask for strict implementation of all the requirements regarding safety, hygiene and traceability controls for both domestic and imported fresh fruit and vegetables. It is well known that over-use or improper usage of chemicals by many farmers, in both timelines and in quantities applied, cannot be fully controlled, compared to imported ones which have to fulfill certain standards. This is connected to the fact that legislators at both national and EU levels have still not managed to provide producers and traders with a set of harmonized directives regarding the use of plant protection chemicals and the maximum quantities to be applied (see also GR-4011 of July 2004, Vol. Report on MRLs).
On average, about 15% of Greek apples produced are kept under refrigeration until February 1 each year. This percentage varies from year to year, according to crop quality, amounts of imported apples and consumer demand. The key factors that determine the amounts kept under refrigeration are imports and domestic apple availability after a certain harvest. Due to large quantities of imported fresh apples, Greek apples are kept in stock to enter the fresh market later in months of shortage (usually in July), while some quantities may be utilized in other ways. Some will probably be exported to Balkan countries at lower prices due to relatively lower quality. As cited above, ways of preserving fruit (as well as all factors connected to good preservation practices) are to be considered by the Greek industry, because large amounts of apples entering the market later in the marketing year are of lower quality, or are priced down and are less preferred by consumers who buy imported apples of higher quality at any price. However, because of the low dollar value against the Euro, prices of imported fruit from third countries are highly competitive. These amounts of preserved (in cold storage) apples do not appear in the attached PS&D in a category of “stocks”. They are part of the Fresh Consumption category. Withdrawals are within the 10% of the marketable amounts allowed by EU regulations.
Due to the same favorable weather, Greek pear production for (MY) 2004/05 is estimated at 45,000 MT, a much higher output (pear crop almost recovered) after the weather damaged 2003 crop, which is finally estimated at 31,000 MT (figure revised from that reported in GR 4001). Due to labor intensive practices required by the pear crop, compared to other deciduous fruit crops, pear production acreage-wise is limited, while high production costs make them less demanded and less competitive in the Greek Market, compared to imported pears. Consequently the final market prices for pears are higher. The supply of fresh pears in the Greek Market depends on imports, mostly from Italy.
Most of the problems pertaining to apple production, as described in the preceding section, affect pears as well. There are problems in the production stage and at the post harvest stage (required treatments that are needed prior to reaching the fresh markets). Significant new plantings are not reported, but there are a large number of young orchards, which gradually enter production every year. There have been some attempts in central Macedonia to restructure fruit crops and a slight shift is observed from peach crops to other crops, pears included. Another, but secondary reason, for proceeding with new plantations is fire blight (Erwinia amylo-vora disease) which has forced farmers to uproot trees and replace them with new ones, particularly of the Krystalli local variety. Williams variety (produced under EU quota) is the best managed variety in Greece (Palmettos –hedges- are common, with more trees per area unit, facilitating better orchard management). Williams are destined for processing and production of fruit cocktails and salads. Other common domestically produced fresh table varieties are cited in the previous AgAthens reports (see also GR 3019 and GR 4001).
Prices
Producer prices for apples this year (farm gate) are expected to fluctuate between €0.28-0.48/Kg compared to €0.30-0.52/kg last year, due to higher output, with Red Delicious and Granny Smith varieties always being the higher priced fruit. As cited above, the dollar value against the Euro, has affected prices of imported apples downwards and reportedly, this year Chilean apples (Red Chief) are imported at prices of €0.88/kg (CIF Basis port of Piraeus). US apples (average weighted price) in 2003 were purchased at €0.89/kg (CIF Basis). Producer prices for domestic apples are not to be compared with import prices, although after a rough calculation by adding wholesalers (7%) and retailers (25 - 27%) profit margins, retail prices of imported apples are close to those of domestic fruit at consistently higher quality and also are available to the consumer off-season. Consumer prices for apples this year have fluctuated between €0.90/Kg – €1.80/Kg according to season, variety and quality. Central Fresh Fruit Market Organization of Athens has classified fresh fruit to three quality grades, EXTRA, N0 I and No II. EXTRA quality apples are the most expensive and available in limited amounts, most of which are imported, as well as a few well-known domestic varieties of high quality.
Pear prices follow the same trends with apples. In periods of shortage, both farm and consumer prices are increased. MY 2003/04 farm prices for pears, per variety produced, are reported in GR 4001 and have fluctuated between €0.40/Kg – €0.90/kg according to variety and quality. Farmer prices for the new crop of MY 2004/2005 are expected to drop slightly due to higher fruit output.
The most popular pear varieties are the Passacrassanas (or Passi Crassana), Abate Fetels, Kristallis and Kontoulas, with retail prices this year fluctuating between €0.97/Kg – €1.90/kg according to variety, season and quality grade. Imported pears from Italy (Abate and Passi Crassana pears) and Spain (Blanquillas) are priced between €1.90-2.00/kg and €1.40-1.45/kg respectively, according to season and quality (retail basis). Turkish and Italian Santa Maria pears are priced between €1.28 – 1.35/kg (retail basis). The Santa Maria pears cover market needs during the summer period from July until late September.
Profit Margins
These prices above are just indicative prices as reported by farming organizations and the Central Fruit and Vegetable Market in Athens. In reality, in grocery stores and open city markets, these fluctuations may differ and be wider, according to location (down town Athens or the suburbs), season and supply/demand trends. The frequent and in most cases, totally unjustifiable fresh fruit and vegetable consumer price fluctuations (upwards) have caused serious complaints from consumers and have alerted GOG authorities to proceed with stricter market police controls in the marketplace.